Financial transactions conducted over a communication s network is widely know and widely used. It is characterised by ease of use and accessibility.
Despite the potential ubiquitous application of a cashless society established through electronic transactions, many potential end-users opt to instead maintain the use of cold hard cash to effect transactions. This may be due to a lack of trust in communicating information relating to such transactions over a communications network, whether wifeless or fixed. It is well-known that communications networks may be vulnerable to security breaches with the result that information carried through these networks may be subject to third party interception and subsequent misuse.
Although electronic payment systems are currently driven by banks, these banks are unable to guarantee the security of information in relation to electronic payments that is communicated between itself and an end user or a third party. However, security issues and management of electronic transactions are by and large left to the end user. Typically end users face electronic threats such as spoofing, phishing and viruses. It is common knowledge that the risk of cyber attack and interception is borne by the consumer, if inadequate and irregular internet security levels are maintained. The uncertain and burden of risk placed upon the shoulders of an end user, and lack of technical expertise in internet security issues in the collective may represent a bar to the universal and confident use and acceptance of electronic payment systems. Recent statistics demonstrate that a low percentage of banking clients use electronic channels to facilitate payments.
The cost of banking electronically has the added expense of pricey security software programs that a user is obliged to incur. This may represent a further reason against the use of electronic banking products.
A further disadvantage that may rank against the use of electronic banking is that banks limit their own liability towards their clients by making no guarantees to the safe, secure and foolproof use of their electronic banking platforms. Monthly banking fees payable by electronic banking clients may include further fees for the use of the internet platform, as well as additional transaction fees for the services offered on the platform.
A yet further disadvantage that may be associated with currently used electronic banking systems is that unauthorised transactions are not flagged and recorded, unless a user lodges a formal complaint. Unauthorized third party use of a banking account via electronic channels may be effected multiple times before an end use notices the existence of unauthorized transactions and intervenes. The process to reverse such transactions is cumbersome and monetary loss is borne by either the consumer, the bank, or both.